JOHNSTOWN, Pa., July 19 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) reported increased earnings for both the quarter and six
month period ended June 30, 2005. ASRV reported net income of $370,000 or
$0.02 per diluted share for the second quarter of 2005 which represented an
increase of $116,000 or 45.7% over the net income performance of $254,000 or
$0.02 per diluted share reported in the second quarter of 2004. For the six
month period ended June 30, 2005, the Company has now earned $1.2 million or
$0.06 per diluted share which represents significant improvement over the net
income of $480,000 or $0.03 per diluted share reported for the six month
period ended June 30, 2004. The following table highlights the Company's
financial performance for both the three and six month periods ended June 30,
2005 and 2004:
Second Second Six Months Six Months
Quarter Quarter Ended Ended
2005 2004 June 30, 2005 June 30, 2004
Net income $370,000 $254,000 $1,203,000 $480,000
Diluted earnings
per share $0.02 $0.02 $0.06 $0.03
At June 30, 2005, ASRV had total assets of $1.0 billion and shareholders'
equity of $86 million or $4.37 per share. The Company's asset leverage ratio
improved to 9.92% at June 30, 2005, compared to 7.71% at June 30, 2004.
Allan R. Dennison, President and Chief Executive Officer, commented on the
improved second quarter 2005 results, "Meaningful asset quality improvements,
the benefits of the balance sheet repositioning strategies executed in the
fourth quarter of 2004, and increased net income contribution from our trust
company were the key factors contributing to the increased earnings in 2005.
I was particularly pleased that our non-performing assets have now declined
for five consecutive quarters and our net charge-offs averaged only 0.05% of
total loans in 2005 compared to 0.48% in 2004. Our loan loss reserve coverage
of non-performing assets has now improved to 284%."
As a result of this improved asset quality, the Company was able to
release a portion of its allowance for loan losses into earnings in the second
quarter of 2005. This loan loss provision benefit amounted to $275,000 in the
second quarter of 2005 compared to a loan loss provision of $259,000 in the
second quarter of 2004. For the six months ended June 30, 2005, the Company
recorded a negative loan loss provision of $275,000 compared to a provision of
$643,000 for the same period in 2004 or a net favorable change of $918,000.
As previously mentioned, the lower levels of non-performing assets and
classified loans evidence the improved asset quality. Non-performing assets
declined from $10.2 million or 2.02% of total loans at June 30, 2004 to
$3.3 million 0.64% of total loans at June 30, 2005. The allowance for loan
losses provided 284% coverage of non-performing assets at June 30, 2005
compared to 254% coverage at December 31, 2004, and 108% coverage at June 30,
2004. The allowance for loan losses as a percentage of total loans amounted
to 1.81% at June 30, 2005.
The Company's net interest income in the second quarter of 2005 increased
by $78,000 from the prior year's second quarter and for the first six months
of 2005 increased by $161,000 when compared to the first six months of 2004.
This improvement reflects the benefits from an increased net interest margin
which more than offset a reduced level of earning assets. Specifically, for
the first six months of 2005 the net interest margin increased by 37 basis
points to 2.69% while the level of average earning assets declined by
$135 million. Both of these items reflect the deleverage of high cost debt
from the Company's balance sheet which has resulted in lower levels of both
borrowed funds and investment securities. The Company's net interest margin
also benefited from increased loans in the earning asset mix as total loans
outstanding averaged $519 million in the first six months of 2005 a
$23 million or 4.7% increase from the same 2004 period. This loan growth was
most evident in the commercial loan portfolio. Deposits continued their
recovery from the low point reached in the fourth quarter of 2004. Total
deposits averaged $696 million for the first six months of 2005, a $34 million
or 5.2% increase from the same 2004 period due to increased deposits from the
trust company's operations. Overall, the Company has been able to generate
increased net interest income from a smaller but stronger balance sheet
despite the negative impact resulting from a flatter yield curve in 2005.
The Company's non-interest income in the second quarter of 2005 decreased
by $181,000 from the prior year's second quarter and for the first six months
of 2005 declined by $972,000 when compared to the first six months of 2004.
Fewer gains realized on asset sales were the primary factor responsible for
the lower non-interest income in 2005. Specifically, gains realized on the
sale of investment securities dropped by $111,000 in the second quarter of
2005 and by $970,000 for the six month period due to the higher interest rate
environment in place in 2005. Deposit service charges only declined by
$12,000 in the second quarter of 2005 but are down by $158,000 for the six-
month period due primarily to fewer overdraft fees. Other income is down by
approximately $162,000 for both the quarter and six-month period due to lower
mortgage production related revenues and declines in several other fee income
categories. These items overshadowed a $159,000 quarterly improvement and a
$364,000 or 13.9% increase in trust fees for the six month period ended June
30, 2005 due to continued successful union-related new business development
efforts and the benefit of new customer fee schedules that were implemented in
the fourth quarter of 2004.
The Company's total non-interest expense in the second quarter of 2005
increased by $69,000 from the prior year's second quarter but for the first
six months of 2005 decreased by $172,000 when compared to the first six months
of 2004. The largest factor causing the quarterly increase in non-interest
expense was an $111,000 increase in professional fees due to higher legal
costs and the initial costs associated with implementing Sarbanes-Oxley
Section 404. Professional fees are also up by $138,000 for the six-month
period. Total employee costs are up by $75,000 for the second quarter and by
$116,000 or 1.2% for six month period ended June 30, 2005 due primarily to
higher medical insurance costs and pension costs which has offset the benefit
of a smaller employee base. The Company did benefit from reduced amortization
of core deposit intangibles that decreased by $142,000 for the quarter and
$284,000 for the six-month period. The closure of the Company's Harrisburg
branch office also contributed to the lower occupancy costs which declined by
$61,000 in the second quarter and by $105,000 for the six months ended
June 30, 2005. Also, the loss from discontinued operations totaled $74,000
for the second quarter and $139,000 for the six-month period as the Company
completed the closure of its mortgage servicing operation as of June 30, 2005.
The Company's first six-months 2005 net income performance was favorably
impacted by an income tax benefit. Specifically in the first quarter of 2005,
the Company lowered its income tax expense by $475,000 due to a reduction in
reserves for prior year tax contingencies as a result of the successful
conclusion of an IRS examination on several open tax years. The Company
returned to a more typical income tax expense in the second quarter of 2005 as
the Company recorded an income tax provision of $96,000 or an effective tax
rate of 17.8%.
AmeriServ Financial, Inc., is the parent of AmeriServ Financial Bank and
AmeriServ Trust & Financial Services in Johnstown, AmeriServ Associates of
State College, and AmeriServ Life Insurance Company.
This news release may contain forward-looking statements that involve
risks and uncertainties, as defined in the Private Securities Litigation
Reform Act of 1995, including the risks detailed in the Company's Annual
Report and Form 10-K to the Securities and Exchange Commission. Actual
results may differ materially.
NASDAQ NMS: ASRV
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA
July 19, 2005
(In thousands, except per share and ratio data)
(All quarterly and 2005 data unaudited)
2005
1QTR 2QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $833 $370 $1,203
PERFORMANCE PERCENTAGES (annualized):
Return on average equity 3.95% 1.75% 2.85%
Net interest margin 2.75 2.63 2.69
Net charge-offs as a percentage of
average loans 0.05 0.06 0.05
Loan loss provision as a percentage
of average loans - (0.21) (0.11)
Efficiency ratio 94.42 96.81 95.60
PER COMMON SHARE:
Net income:
Basic $0.04 $0.02 $0.06
Average number of common shares
outstanding 19,720,827 19,726,345 19,723,601
Diluted 0.04 0.02 0.06
Average number of common shares
outstanding 19,760,049 19,764,647 19,762,371
2004
1QTR 2QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $226 $254 $480
PERFORMANCE PERCENTAGES (annualized):
Return on average equity 1.21% 1.41% 1.31%
Net interest margin 2.39 2.25 2.32
Net charge-offs as a percentage of
average loans 0.48 0.48 0.48
Loan loss provision as a percentage
of average loans 0.31 0.21 0.26
Efficiency ratio 93.83 94.80 94.29
PER COMMON SHARE:
Net income:
Basic $0.02 $0.02 $0.03
Average number of common shares
outstanding 13,962,010 13,969,211 13,965,611
Diluted 0.02 0.02 0.03
Average number of common shares
outstanding 14,025,836 14,023,577 14,023,450
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
(All quarterly and 2005 data unaudited)
2005
1QTR 2QTR
PERFORMANCE DATA AT PERIOD END:
Assets $996,450 $996,786
Investment securities 381,124 385,398
Loans 527,344 522,437
Allowance for loan losses 9,856 9,480
Goodwill and core deposit intangibles 12,896 12,680
Mortgage servicing rights - -
Deposits 725,369 691,740
Stockholders' equity 83,720 86,267
Trust assets - fair market value (B) 1,465,028 1,487,496
Non-performing assets 3,819 3,334
Asset leverage ratio 9.77% 9.92%
PER COMMON SHARE:
Book value (A) $4.24 $4.37
Market value 5.61 5.35
Market price to book value 132.35% 122.36%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 394 383
Branch locations 22 22
Common shares outstanding 19,722,884 19,729,678
2004
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT PERIOD END:
Assets $1,099,564 $1,178,406 $1,088,849 $1,009,976
Investment securities 504,980 581,553 488,617 401,019
Loans 503,404 500,522 506,551 521,416
Allowance for loan losses 11,379 10,932 9,827 9,893
Goodwill and core deposit
intangibles 13,905 13,547 13,329 13,112
Mortgage servicing rights 1,493 1,642 1,395 -
Deposits 656,348 670,941 659,176 644,391
Stockholders' equity 77,721 67,213 73,471 85,219
Trust assets - fair market
value (B) 1,256,064 1,246,458 1,228,126 1,309,362
Non-performing assets 13,482 10,155 5,047 3,894
Asset leverage ratio 7.75% 7.71% 7.85% 9.20%
PER COMMON SHARE:
Book value $5.57 $4.81 $5.26 $4.32
Market value 6.10 5.55 5.00 5.17
Market price to book value 109.52% 115.50% 95.13% 119.62%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 415 412 409 406
Branch locations 23 23 23 23
Common shares outstanding 13,965,737 13,972,424 13,978,726 19,717,841
Note:
(A) Other comprehensive income had a negative impact of $0.18 on book
value per share at June 30, 2005.
(B) Not recognized on the balance sheet
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2005 data unaudited)
2005
1QTR 2QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $7,954 $8,105 $16,059
Total investment portfolio 3,737 3,607 7,344
Total Interest Income 11,691 11,712 23,403
INTEREST EXPENSE
Deposits 2,845 3,188 6,033
All other funding sources 2,551 2,533 5,084
Total Interest Expense 5,396 5,721 11,117
NET INTEREST INCOME 6,295 5,991 12,286
Provision of loan losses - (275) (275)
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,295 6,266 12,561
NON-INTEREST INCOME
Trust fees 1,472 1,506 2,978
Net realized gains on investment
securities available for sale 78 - 78
Net realized gains on loans held for sale 72 83 155
Service charges on deposit accounts 584 704 1,288
Bank owned life insurance 250 254 504
Other income 692 633 1,325
Total Non-Interest Income 3,148 3,180 6,328
NON-INTEREST EXPENSE
Salaries and employee benefits 4,751 4,680 9,431
Net occupancy expense 668 592 1,260
Equipment expense 639 622 1,261
Professional fees 823 938 1,761
FDIC deposit insurance expense 71 69 140
Amortization of core deposit intangibles 216 216 432
Other expenses 1,775 1,789 3,564
Total Non-Interest Expense 8,943 8,906 17,849
INCOME BEFORE INCOME TAXES 500 540 1,040
Provision (benefit) for income taxes (398) 96 (302)
Income from continuing operations $898 $444 $1,342
Loss from discontinued operations (65) (74) (139)
NET INCOME $833 $370 $1,203
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly data unaudited)
2004
1QTR 2QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $7,691 $7,679 $15,370
Total investment portfolio 5,228 4,943 10,171
Total Interest Income 12,919 12,622 25,541
INTEREST EXPENSE
Deposits 2,543 2,529 5,072
All other funding sources 4,164 4,180 8,344
Total Interest Expense 6,707 6,709 13,416
NET INTEREST INCOME 6,212 5,913 12,125
Provision of loan losses 384 259 643
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 5,828 5,654 11,482
NON-INTEREST INCOME
Trust fees 1,267 1,347 2,614
Net realized gains on investment
securities available for sale 937 111 1,048
Net realized gains on loans held for
sale 40 115 155
Service charges on deposit accounts 730 716 1,446
Bank owned life insurance 275 276 551
Other income 690 796 1,486
Total Non-Interest Income 3,939 3,361 7,300
NON-INTEREST EXPENSE
Salaries and employee benefits 4,710 4,605 9,315
Net occupancy expense 712 653 1,365
Equipment expense 648 630 1,278
Professional fees 796 827 1,623
FDIC deposit insurance expense 72 71 143
Amortization of core deposit
intangibles 358 358 716
Other expenses 1,888 1,693 3,581
Total Non-Interest Expense 9,184 8,837 18,021
INCOME BEFORE INCOME TAXES 583 178 761
Provision (benefit) for income taxes 126 (55) 71
Income from continuing operations $457 $233 $690
Income (loss) from discontinued operations (231) 21 (210)
NET INCOME $226 $254 $480
AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(All quarterly and 2005 data unaudited)
Note: 2004 data appears before 2005.
2004 2005
SIX SIX
2QTR MONTHS 2QTR MONTHS
Interest earning assets:
Loans and loans held for sale,
net of unearned income $495,519 $495,623 $518,735 $519,060
Deposits with banks 5,117 4,845 524 922
Federal funds sold 47 137 - -
Total investment securities 554,425 548,093 391,072 393,483
Total interest earning assets 1,055,108 1,048,698 910,331 913,465
Non-interest earning assets:
Cash and due from banks 21,221 21,667 20,290 21,216
Premises and equipment 10,580 10,781 9,523 9,603
Assets of discontinued operations 3,511 3,353 1,718 1,775
Other assets 66,392 64,828 61,513 62,343
Allowance for loan losses (11,258) (11,358) (9,841) (9,854)
Total assets 1,145,554 1,137,969 993,534 998,548
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand 53,266 52,552 54,089 53,923
Savings 106,627 105,928 99,410 99,509
Money market 118,704 119,567 163,391 154,142
Other time 279,128 276,684 288,499 282,791
Total interest bearing
deposits 557,725 554,731 605,389 590,365
Borrowings:
Federal funds purchased,
securities sold under
agreements to repurchase,
and other short-term borrowings 134,982 131,693 68,212 88,666
Advanced from Federal Home
Loan Bank 226,050 226,430 101,011 101,017
Guaranteed junior subordinated
deferrable interest debentures 35,567 35,567 20,285 20,285
Total interest bearing
liabilities 954,324 948,421 794,897 800,333
Non-interest bearing liabilities:
Demand deposits 107,295 106,820 106,234 105,538
Liabilities of discontinued
operations 551 403 612 624
Other liabilities 10,722 8,423 6,959 6,829
Stockholders' equity 72,662 73,902 84,832 85,224
Total liabilities and
stockholders' equity $1,145,554 $1,137,969 $993,534 $998,548
SOURCE AmeriServ Financial, Inc.
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Related links:
http://www.ameriservfinancial.com
CONTACT:
Jeffrey A. Stopko, Senior Vice President &
Chief Financial Officer of AmeriServ Financial, Inc.,
+1-814-533-5310
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